FHA Home Loans Help Homebuyers in 2017

FHA home loans help homebuyers from all across the country attain their dream of homeownership. Historically, FHA loans offer more leniency on loan qualifying parameters than any other type loan which makes homeownership available to homebuyers who might otherwise not qualify.

FHA home loans are able to offer easier loan qualifying because of the mortgage insurance premiums which protect lenders from loss if the borrower defaults. Two mortgage insurance premiums are required on an FHA loan, no matter how much of a down payment you make.

Up Front Mortgage Insurance Premium – This upfront premium is rolled into your financed amount and is 1.75% of your loan amount.

Annual Mortgage Insurance Premium – This amount is paid monthly as a part of your monthly total mortgage payment. This rate was just reduced for loans with terms greater than 15 years.

FHA has reduced its monthly mortgage insurance premiums, near premium rates not seen since prior to Fall of 2010. The previous monthly rate was 0.85% on loans with a 3.5% down payment. That rate has now dropped to 0.60%, effective with transactions dated January 26th or later.

Lower Monthly Mortgage Insurance Premiums Accomplishes Two Things

Lower Payment and Increased Savings

The annual mortgage premium is paid monthly as a part of your total monthly mortgage payment. The lower mortgage insurance premium saves you money on your monthly payment. On a $300,000 loan amount, the lower mortgage insurance premium will reduce your payment by about $62 per month.

Increased Buying Power

The increase in buying power enables you to qualify for a larger loan amount. If you qualified for a maximum loan amount of $300,000, with the lower monthly premium, you will qualify for about $11,000 more. This means you will be able to purchase a home with a price tag of around $14,000 to $15,000 more.

More good news for FHA Home Loans

FHA home loan limits were increased for 2017 making more homes eligible for FHA buyers. The new loan limit for Dallas-Fort Worth increased to $362,250…up $27,600 from last year which means more homes are available to FHA homebuyers.

FHA home loans require a minimum 3.5% down payment. With the increase in the maximum loan amount to $362,250 in the Dallas-Fort Worth (DFW) area, you can purchase a home with a sales price of $371,539. This means more homes are available to you for FHA financing.

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ElizabethRoseBlogs.com is a site that provides information about housing, mortgages, and breaking economic news. The information contained on ElizabethRoseBogs site is for informational purposes only and is not an advertisement for products or services. The views and opinions expressed herein are those of the author. We are not affiliated with the US Government, US Armed Forces or Department of Veteran Affairs. This site is not connected with any government agency. This is not an advertisement to extend consumer credit as defined in Regulation Z.226.2. Consumers are encouraged to consult tax advisors, real estate attorneys, or other relevant professionals regarding their personal circumstances and state regulations.